FinSight: Uzbekistan May Lead Region in Digitalization

Tashkent, Uzbekistan (UzDaily.com) — FinSight Ventures is an international venture fund incorporated in 2014 in San Francisco. The fund specializes in investments in technology startups — fintech, B2B SaaS, and artificial intelligence — across early and late stages (Seed, Series A, Series B). FinSight's portfolio includes more than 100 companies across markets such as India (Betterhalf, Bimaplan, Cardekho, Hyperface, MediBuddy, Razorpay, Superfone, Visa2Fly), Pakistan (Krave Mart), South Korea (Toss), Latin America (Rappi, Punto Pago), the EU (Klarna), and the United States.

In 2024, FinSight became one of Uzum's first international investors. In an interview with UzDaily, FinSight Ventures co-founder and managing partner Alexei Garyunov explained how Uzum came onto the fund's radar, where Uzbekistan holds a competitive edge over India and the Middle East, and how the FinSight Generative AI Index Fund — a portfolio spanning Scale AI, Databricks, Glean, Cursor, Clay, Intercom, ElevenLabs, and other unicorns — gives private investors simultaneous exposure to the leading companies in generative AI.

— FinSight Ventures has entered the Uzbekistan market, becoming one of Uzum's first international investors. How does Uzbekistan differ from India, Latin America, and the Middle East? What advantages has international capital overlooked here?

The country was closed for decades, yet it had a powerful foundation for economic development in general and the IT sector in particular: natural resources, a population more than half of which is under 30, a highly educated nation with deep cultural traditions and mature social institutions — heirs of Tamerlane, if you will. The population carries little consumer debt but actively uses smartphones, while consumer products and services were critically scarce.

With President Shavkat Mirziyoyev's arrival in 2016, everything changed dramatically. A large-scale economic revival began, and companies moved swiftly to satisfy the pent-up consumer demand, bringing the best technologies and approaches from other markets. That is how we discovered Uzum — a company with a first-class team and cutting-edge approaches to e-commerce and financial services.

Uzbekistan's strengths are considerable. The country has more than 200 universities, half of which produce graduates in IT and economics — a talent pipeline comparable in scale to the entire Gulf region. A distinct identity has emerged: the "Uzbek IT specialist" who works for Western companies. Unlike India, Uzbekistan has a 100% literacy rate, still an exceptionally rare indicator on a global scale. Founders are technically capable and — critically — accustomed to building ventures under resource constraints. Unlike in many other markets, companies here focus on profitability from the outset. Residents of IT Park are exempt from corporate tax, VAT, social tax, and customs duties, with those benefits guaranteed until 2040 — a horizon of predictability that is exceptionally rare among emerging markets. By comparison, tax incentives for startups in India are time-limited and require complex reporting, while in Latin America tax regimes shift with the political cycle.

That said, we encountered real challenges in Uzbekistan as well. India and Latin America already have several generations of serial entrepreneurs. Uzbekistan's ecosystem is young — retaining talent, achieving regulatory maturity, and scaling beyond the region remain key challenges. Exit opportunities are the most acute vulnerability: India has a mature public market; Dubai and Riyadh in MENA are actively courting IPOs; Latin America has exchanges in Brazil and Mexico. In Uzbekistan, that path has yet to be built.

What is international capital missing in Uzbekistan right now? The ability to recruit young professionals and rapidly assemble teams that deliver far greater productivity at far lower cost than comparable hires in Bangalore or Dubai.

— What factors convinced you that Uzum is a future unicorn? What was FinSight Ventures' role in the recent $130 million funding round?

We always invest based on three fundamental principles — nothing revolutionary, but execution discipline makes all the difference. First, a product that users love — not merely use, but genuinely love. Second, a vast market opportunity combined with macroeconomic stability. Third, a team capable of delivering on that potential.

All three factors converged in Uzum, which is why we are confident that the country's largest digital ecosystem will continue to grow and realize the market's full potential.

— How does consumer behavior in Uzbekistan differ from India or Southeast Asia? Is Uzum solving a fundamentally different problem?

One of the key distinctions is the overwhelming dominance of offline commerce in Uzbekistan compared to India. E-commerce penetration in Uzbekistan stands at just 3%, against 10–11% in India, and by various estimates some 84% of retail transactions in Uzbekistan still take place at bazaars rather than in modern retail formats. Offline infrastructure — ATM networks, pickup points, the ability to withdraw cash against a credit limit — are significant factors in a consumer's choice of bank or marketplace.

Today, Uzum Market's primary competitor is the offline channel itself. To make the product mainstream, the company must compete with offline on price, assortment, and proximity of pickup points. The Uzbek government is actively rolling out digital public services and incentivizing the shift to cashless transactions, but full digital transformation — including in the regions — requires more time.

Another key distinction: Uzbekistan is rapidly expanding its network of order pickup points — infrastructure that essentially does not exist in India. This reshapes the unit economics of delivery and opens up business models that are simply not viable in the Indian market.

Uzum is forming a new habit for millions of users — a new way of handling everyday tasks. E-commerce, with its broad assortment and competitive pricing, serves as the acquisition driver, drawing in an audience that then adopts fintech tools and uses them with growing frequency. This is how a unique competitive advantage is built, alongside — equally important — a habit of expecting quality service.

— Structural risks often come down to currency, imports, and capital. How does FinSight mitigate these risks? Might they actually create a competitive advantage for first-mover companies?

Everything you mention is a reality of this market. But two factors fundamentally change the equation.

First, we invest with a long time horizon and do not react to monthly or quarterly fluctuations.

Second, we invest in companies that are growing many times faster than the market. That rate of growth smooths out currency volatility.

And here is what matters: Uzbekistan's exports are growing faster than its imports. There is a reasonable chance that the trade balance will turn positive in the foreseeable future. Combined with the inflow of foreign direct investment and international remittances, this could further strengthen the foundations of the Uzbek economy. We are betting on a trend, not a moment-in-time situation.

— Where do you see Uzum in five years? What is the potential of Uzbekistan's digital economy as a whole?

Product lineup and market selection are tactics — important tactics, but tactics nonetheless. Those decisions belong to the founding team and management led by Jasur Jumaev. Our conviction lies at the strategic level: Uzum is on a trajectory to become the largest internet company in Central Asia. And Uzbekistan — with its young population, growing economy, and government support for the IT sector — is a powerful foundation for the most ambitious corporate aspirations.

As for the potential of the country's digital economy: imagine a market comparable to Saudi Arabia in population and twice the size of neighboring Kazakhstan, with a young demographic, rapidly developing infrastructure, accessible internet, and rising IT competency levels. We see enormous potential in the country's digital economy, and on a five-year horizon Uzbekistan could emerge as the region's leader in digitalization.

— Last September, FinSight Ventures launched the FinSight Generative AI Index Fund — a $50 million vehicle focused on private-market leaders in generative AI. What was the logic behind an index approach rather than concentrated bets? Which portfolio companies do you see as most promising?

The AI market is being restructured in real time — leaders shift, new segments emerge within months. Making concentrated bets in such conditions is akin to playing roulette. We took a different approach: we gave investors the ability to buy the entire AI landscape in a single product — every key vertical, every frontier technology. In essence, we addressed a gap that has long existed in private markets: there was no equivalent of an index fund. On public markets, this has long been standard practice. We brought that logic to venture capital.

We make a point of not singling out individual portfolio companies — they are there for one reason: they are already leaders in their segment. The more precise question, therefore, is not which company is best, but which segments of AI are seeing the fastest penetration. We see clear patterns here.

Search and data aggregation were the pioneers of AI transformation — the most natural user case for the baseline capabilities of large language models. Coding became the first independently multi-billion-dollar market in AI; developers by definition are early adopters of new technology, and that accelerated explosive growth. Healthcare has seen surprisingly rapid adoption, despite the sector's reputation for conservatism. Legal took time to gain momentum, but the pace is now impressive — several companies in the segment crossed the $100 million ARR threshold within a single year.

We are convinced that the next wave will be AI's penetration into the physical world. This is where the Moravec paradox applies: the things that are easy for humans — walking, vision, coordination, contextual understanding — are hard for machines, while what is difficult for humans, such as mathematics, logic, and large-scale data analysis, machines mastered relatively quickly. The reason is simple: abstract reasoning is an evolutionarily recent skill, and we lack deeply optimized neural structures for it — computers catch up with us faster. Sensorimotor skills, by contrast, were refined over millions of years, and AI is only beginning that journey. That is precisely why the next frontier is robotics, autonomous systems, and everything connected to the physical world.

We believe so strongly in this wave that we are already preparing our next fund — structured along the same lines as the Generative AI Index Fund — which will bring together the leading companies in the world of Physical AI. We will share details in due course.

— How does FinSight handle liquidity and lock-up periods? What is the exit strategy on a three-to-five-year horizon?

The key distinction of our fund from the classic venture approach is that we prioritize company selection over the ability to participate in a specific round. We first identify who we want in the portfolio, then find any viable path to becoming an investor — including through the secondary market.

It is important to understand: shares in leading AI companies are a highly liquid asset. Even if a company does not go public within the life of our fund, we always have the option to sell on the secondary market. This is not theoretical — it is a working mechanism we use on a regular basis.

— Do you see opportunities for deploying generative AI within Uzum and other portfolio companies? Could Uzbekistan become a testing ground for AI technologies?

Generative AI is already an integral part of the technology stack at most modern companies, and Uzum is no exception. The majority of developers today write code using AI-assisted tools, and intelligent algorithms are actively applied in credit scoring, personalized recommendations, pricing, customer support, and marketing.

But here is what is genuinely compelling: Uzbekistan has a structural advantage that cannot be bought — the absence of technical debt and legacy systems. Every company being built here today is executing a technological leapfrog, delivering capabilities that are far more advanced than those of counterparts built a decade ago in other markets, while services are designed from the ground up around local needs and market realities — as we see clearly in the case of Uzum.

This is the same effect we witnessed in Africa with mobile payments: when legacy infrastructure is absent, new technologies are adopted without resistance.

— Is there an "AI bubble"? Which segments of the AI industry are most vulnerable? What will survive a 30–50% correction?

Valuations of AI startups are based on revenue growth rates and sector penetration. Companies that demonstrate the ability to sustain their growth trajectory will continue to command a market premium. Take Anthropic — how many companies in the world are capable of growing four to seven times year-on-year on revenue bases measured in billions of dollars?

What matters is not today's market size but tomorrow's. Ultimately, every company is valued at a multiple of its net profit, and the central question is whether it can demonstrate positive unit economics momentum leading to profitability.

That is where the dividing line falls: companies that are fundamentally incapable of profitability will lose value. Those approaching profitability will continue to appreciate. Why are some unable to demonstrate a path to profit? In AI, we frequently encounter the same pattern: insufficient standalone product value — users are not willing to pay much, which is reflected in thin gross margins. That is the litmus test.

— What distinguishes true leaders of the AI industry from companies that have simply ridden the wave of hype? What is the funds' target return?

Our target return is 35% annually on a risk-adjusted basis. True leaders are defined by a simple but unforgiving formula: rapid revenue growth with healthy unit economics, where product reputation spreads by word of mouth rather than inflated advertising budgets. These are companies that genuinely change the way we live — how we communicate, travel, search for information, treat illness, and build cities.

Every great company has a competitive moat, and as those companies mature, those barriers become increasingly insurmountable — because anything can be replicated, the question is only what resources it requires. We invest in companies whose moat grows wider with every passing year.